Phased Retirement for Teaching Staff (People Management Handbook for Schools)

Phased Retirement for Teaching Staff (People Management Handbook for Schools)

Phased Retirement for Teaching Staff (People Management Handbook for Schools)

Phased retirement is a flexible provision in the Teachers' Pensions Scheme that offers members greater choice about the way in which they manage the transition from work to retirement.

Phased retirement enables eligible employees to retire partially by reducing their hours and/or salary and draw their accrued pension benefits subject to certain qualifying criteria.

Policy Provisions

Phased retirement enables employees who are aged 55 years or over whom, with the agreement of their employer, change the capacity in which they are working so that their pensionable salary is reduced by at least 20% compared to the average of the salary they have received during the proceeding six months.

The reduction in salary, which must last at least twelve months, could be a result of moving from a part time position or taking up a post with less responsibility.

Should the salary of the teacher go above the 20% reduction required in the first twelve months then the application will be void and future pension payments will be suspended.

Teachers can take up to 75% of their pensions benefits that they have accrued in the Teachers' Pensions Scheme at the date the phased retirement begins. If taken before the normal retirement age, the benefits will be actuarially reduced to take into account the fact they have been receiving payments from an earlier date and therefore will be in receipt of payment for a longer period.

The benefits of the scheme are as follows:

  • Enables the school to support employees to phase into retirement, whilst ensuring the needs of the school are met.
  • Enables the school to retain key employees' and facilitate knowledge transfer
  • There is no requirement for employees to break their continuity of service, therefore preserving the calculation to certain contractual benefits and employment rights.
  • Remaining service will be aggregated together with any subsequent service accrued for future benefit calculations.

Eligilbility Conditions

To be eligible to make a request for phased retirement the teacher must:

  • Actively be making contributions to the Teachers' Pensions Scheme.
  • Be aged 55 years or over.
  • Be taking at least a 20% reduction in their hours and/or substantive salary.
  • Applying to take phased retirement within three months of taking up their new employment.
  • Have the agreement of the school for the new hours/grade (the appointment may be with a different school/employer).

Conditions of phased retirement

If phased retirement is agreed, it is on the understanding that:

  • A trial period for phased retirement is not allowed due to the direct impact on pension benefits, business planning, management and other staff.
  • The employee accepts permanent variation of hours/salary and all terms and conditions of service will be adjusted accordingly.
  • Increase in hours or salary following phased retirement will be permitted in certain circumstances, where it meets the needs of the business and subject to relevant approval from the Governing Body.

Process for making a request for Phased retirement

Exploration of feasibility of phased retirement

Employees considering making an application for phased retirement should in the first instance discuss this with the head teacher to discuss the feasibility of the arrangement within the school.

The head teacher will also need to liaise with the school’s payroll provider and pension section to determine the new salary to ensure that there is a reduction of 20% as outlined in the criteria.

The head teacher will then be required to give serious consideration to the employee's request. Part of the discussions should include exploring whether the employee's request can be accommodated in the school.

Business case

If the head teacher agrees to support the individual's application for phased retirement they will need to prepare a business case making the recommendation to the governing body (see Appendix 1 – Template for Business Case).

The business case should include details of the impact on the school, the benefits for the school as well as the individual and the associated costs.

Processing the request

The teacher will need to complete form 'Phased - Application for Retirement Benefits' form (PHASED APP) which is available to download from

The form should be completed by the teacher and returned to the school’s HR administration/payroll provider for completion and authorisation. The head teacher will need to ensure that the appropriate documentation has been sent to HR administration/provider for processing, for example the appropriate documentation authorising the change of hours and/or grade otherwise the change will not be authorised potentially resulting in a delay of any benefits.

Upon receipt of the application, Teachers' Pensions will contact the teacher direct regarding their entitlements and payment of benefits.

The Local Authority is required to keep records, for audit purposes, on all decisions relating to pensions. Therefore details of the business case and the decision made by the governing body should be communicated to the LA’s HR team and pensions section who will advise the Chief Executive of the decision.

further information

Employees who wish to gain further advice regarding the phased retirement scheme should contact Teachers' Pensions on 0845 6066166 or by visiting:

APPENDIX 1

Template for Business Case

For the attention of the Governing Body

At: [name] School

From: [head teacher]

Re: Request for Phased Retirement

A request has been made by the following employee to take phased retirement in accordance with the procedure for the Teachers’ Pensions Scheme.

Employee: [name]

Position: [title]

[Name] is [age] years old and wishes to make an application for phased retirement with effect from [date].

[Name] has been employed by the school since [date].

Impact on School

[The head teacher needs to discuss the impact on the school of the proposed change in hours and/or grade]

Recommendation

The head teacher, [name] has reviewed the details of the case and supports the request made by the employee.

Signed: [head teacher]

Date: [date]

APPENDIX 2

Flowchart

The teacher decides to apply for phased retirement and raises this initially with the head teacher.

A review is conducted as to whether a) the teacher meets the criteria and b) whether the request can be accommodated by the school.

The head teacher liaises with schools payroll provider and pensions section to ensure that the reduction equals or exceeds the 20% as outlined in the criteria.

If the head teacher supports the application for phased retirement, they will produce a business case outlining the impact on the school and how this will be managed. This will then be presented to the Governing Body for approval.

When the application has been approved by the Governing Body relevant details regarding the change in hours and/or grade is sent through to payroll provider for processing.

The teacher completes form ‘Phased – Application for Retirement Benefits’ and submits this to HR administration/payroll for processing.

HR administration/payroll complete and authorise the form and submit it to Teachers’ Pensions for processing.

Teachers’ Pensions will contact the teacher direct regarding their benefits and payment of benefits.

New contract issued to the teacher by the school.